Food and Resource Economics Department
Cooperative Extension Service
Institute of Food and Agricultural Sciences
University of Florida, Gainesville 32611

November 1979

ABSTRACT

The costs of processing, warehousing and selling Florida citrus
products for the 1977-78 season are estimated to have increased from
1976-77 levels. The estimated total cost of producing 48 6-ounce
cans of orange concentrate increased to $3.63--a four percent increase
from 1976-77 levels while the costs of producing single strength orange
juice in 12 46-ounce cans are estimated to have increased to $3.19--a
nine percent increase from 1976-77 levels.

Key words:
processing costs,

citrus marketing, citrus processing, marketing margins,
citrus.

ACKNOWEDGEMNTS

for
and

We wish to express our appreciation to the participant processors
their excellent cooperation, and to Mrs. Theresa Zerr for her clerical
secretarial assistance.

ABSTRACT

The costs of processing, warehousing and selling Florida citrus
products for the 1977-78 season are estimated to have increased from
1976-77 levels. The estimated total cost of producing 48 6-ounce
cans of orange concentrate increased to $3.63--a four percent increase
from 1976-77 levels while the costs of producing single strength orange
juice in 12 46-ounce cans are estimated to have increased to $3.19--a
nine percent increase from 1976-77 levels.

Key words:
processing costs,

citrus marketing, citrus processing, marketing margins,
citrus.

ACKNOWEDGEMNTS

for
and

We wish to express our appreciation to the participant processors
their excellent cooperation, and to Mrs. Theresa Zerr for her clerical
secretarial assistance.

The costs of processing, warehousing and selling Florida citrus
products for the 1977-78 season are estimated to have increased from
1976-77 levels. The estimated total costs of producing 48 six-ounce
cans of orange concentrate has increased to $3.63--a four percent
increase from 1976-77 levels while the costs of producing single
strength orange juice in 12 46-ounce cans are estimated to have
increased to $3.19--a nine percent increase from 1976-77 levels.

INTRODUCTION

The purpose of this study was to develop estimates of processing
costs for Florida citrus products for the 1977-78 season. Citrus
processing cost data were obtained from 13 firms. The total volume
for each type of product and the percentage of total Florida production
processed by firms in the sample are shown in Table 1. The chilled
juices were not reported this year because of lack of participation
by chilled juice firms.
Most firms provided average unit costs from their audited financial
statements. The following summaries present estimates of the average
costs for plant operation, warehousing and selling the finished products.
Fruit costs are not included. The numbers shown in the following tables

R. CLEGG HOOKS is an assistant in Agricultural Economics and
RICHARD L. KIIIER is an assistant professor in Food and Resource Economics.

Table 1.--Volume of citrus products produced by sample firms relative to
the total volume produced in Florida, 1977-78 season

Percentage Sample
Proct Total Total of total fi
produced produced Florida producing
by sample in production each
firms Floridaa produced by prouc
product
sample firms

are weighted averages where the weights are the volumes packed of each
product by each firm. Weighted averages tend to place the numbers
reported in the tables closer to the costs for those firms with the
larger volume of each of the products.
The firms were not selected according to a sample design. Some
of the year-to-year cost variation can be attributed to variation in
the firms in the sample and the distribution of the total volume of
each product among sample firms.
Detailed costs were aggregated into several major cost categories
for each product and can size to give a total cost unsweetened.
Selling costs include brokerage as well as the firms' sales
department expense. Discount allowances and brand royalties have been
omitted.

FROZEN CONCENTRATE

The estimated costs of processing, warehousing and selling orange,
grapefruit and blended frozen concentrate in various retail and bulk
forms are shown in Tables 2,3,4,5 and 6.
Estimated average costs for packing 48 six-ounce cans of orange
concentrate in cases are shown in Table 2 along with item-by-item
comparisons to 1976-77 estimates. Total costs were estimated at $3.63
per case --a nine percent increase above 1976-77 estimates. The
items with the largest increase were: other processing expense, up
nine percent; and selling expense, up twelve percent.
Tables 3,4,5 and 6 show costs of packing other retail and in
institutional packages as well as bulk concentrate in drums.
The changes in costs for the other retail packs are similar to
those shown for the 48 six-ounce cans in cases. The total estimated
costs for 24 12-ounce, 24 16-ounce and 12 32-ounce cans in cases
increased four, one and five percent above 1976-77.
Bulk 450 brix orange concentrate costs shown in Table 5 were up
two percent from 1976-77 estimates while the cost for equivalent
gallons for all packs (excluding materials) is estimated to have

increased four percent.
The costs of processing 580 brix bulk orange and grapefruit
concentrate are shown in Table 6.

SINGLE STRENGTH JUICES

Estimated average single strength processing, warehousing and
selling costs are shown in Tables 7,8 and 9.
Table 7 shows estimated single strength processing costs for 12
46-ounce cans in cases for 1977-78 with comparisons to 1976-77 estimates.
Materials expense was the item showing the largest absolute increase,
while cost increases for other items ranged from eight to ten percent
with the outcome being a nine percent increase in total costs
over 1976-77 estimates.

CITRUS FEED

The estimated costs of processing citrus feed in bulk are shown
in Table 10.
Citrus feed processing costs per ton for 1977-78 are estimated
to be $42.50, an eleven percent increase over the 1976-77 season.

COSTS AND PRICE TRENDS

Costs for processing, warehousing and selling 48 six-ounce cans of
concentrate in cases remained relatively stable through the 1971-72
season (Table 11). From 1971-72 through 1974-75, costs increased by
$1.03 (46 points) while average retail price increased $.25 (3 points).
Since 1974-75, costs have increased 21 cents (9 points) while the average
retail price has increased $3.07 (38 points).
Changes in the cost categories that make-up the total processing,
warehousing and selling expenses for 48 six-ounce cans of orange con-
centrate are shown in Table 12. Administrative cost decreased while the
remaining cost categories remain constant or increased relative to

This public document was promulgated at an annual cost of $961.00 or
$0.80 per copy to report citrus processing research results to county
agricultural directors and firms and agencies in the citrus industry.